Computer Associates 2011 Annual Report Download - page 86

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments that are
not measured at fair value on a recurring basis:
(IN MILLIONS)
CARRYING
VALUE
ESTIMATED
FAIR
VALUE
CARRYING
VALUE
ESTIMATED
FAIR
VALUE
AT MARCH 31, 2011 AT MARCH 31, 2010
Assets:
Noncurrent portion of installment accounts receivable
(1)
$—$—$46$46
Liabilities:
Total debt
(2)
$ 1,551 $ 1,619 $ 1,545 $ 1,600
Facilities abandonment reserve
(3)
$52$59$69$79
(1) Estimated fair value of the noncurrent portion of installment accounts receivable approximates carrying value.
(2) Estimated fair value of total debt is based on quoted prices for similar liabilities for which significant inputs are observable except for certain long-term lease obligations, for which fair value
approximates carrying value.
(3) Estimated fair value for the facilities abandonment reserve was determined using the Company’s incremental borrowing rate at March 31, 2010. The facilities abandonment reserve includes
approximately $15 million and $22 million in “Accrued expenses and other current liabilities” and approximately $37 million and $47 million in “Other noncurrent liabilities” on the Company’s
Consolidated Balance Sheets at March 31, 2011 and 2010, respectively.
Note 12 — commitments and contingencies
The Company leases real estate, data processing and other equipment with lease terms expiring through fiscal year 2023.
Certain leases provide for renewal options and additional rentals based on escalations in operating expenses and real estate
taxes.
Rental expense under operating leases for facilities and equipment was approximately $200 million, $163 million and
$161 million for fiscal years 2011, 2010 and 2009, respectively. Rental expense for fiscal years 2011, 2010 and 2009
included sublease income of approximately $23 million, $18 million and $22 million, respectively.
Future minimum lease payments under non-cancelable operating leases as of March 31, 2011, were as follows:
FISCAL YEAR (IN MILLIONS)
2012 $ 101
2013 87
2014 65
2015 55
2016 50
Thereafter 171
Total 529
Less income from sublease (30)
Net minimum operating lease payments $ 499
The Company has additional commitments to purchase goods and services of approximately $247 million in future periods,
approximately $236 million of which expires by fiscal year 2016.
Prior to fiscal year 2001, the Company sold individual accounts receivable under the prior business model to a third party
subject to certain recourse provisions. At March 31, 2011, none of these receivables were outstanding. The outstanding
principal balance of these receivables subject to recourse approximated $21 million at March 31, 2010.
Litigation: The Company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that
a liability has been incurred and the amount of the loss can be reasonably estimated. Claims and proceedings are reviewed at
least quarterly and provisions are taken or adjusted to reflect the impact and status of settlements, rulings, advice of counsel
and other information pertinent to a particular matter.
In April 2010, a lawsuit captioned Stragent, LLC et ano. v. Amazon.com, Inc., et al. was filed in the United States District Court
for the Eastern District of Texas against the Company and five other defendants. The complaint alleges, among other things,
that Company technology infringes a patent assigned to plaintiff SeeSaw Foundation and licensed to plaintiff Stragent LLC,
entitled “Method of Providing Data Dictionary-Driven Web-Based Database Applications,” U.S. Patent No. 6,832,226. The
complaint seeks monetary damages and interest in an undisclosed amount, and costs, based upon plaintiffs’ patent
infringement claims. In May 2010, the Company filed an answer and counterclaims that, among other things, dispute the
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